GBP/USD Plunges 1% in One-Hour Flash Crash

GBP/USD experienced a dramatic 1% decline (approximately 125 pips) within just one hour, marking a significant flash crash event in the British pound. The sharp selloff caught traders off-guard, with the pair breaking through multiple support levels in rapid succession. While specific catalysts remain unclear, the velocity of the move suggests potential algorithmic trading involvement or liquidity-driven stop-loss cascades. The pound's weakness reflects ongoing concerns about UK economic fundamentals and potential Bank of England policy divergence from other major central banks. Technical damage appears severe, with the pair likely breaking below key moving averages and psychological support levels. Immediate support may emerge at recent swing lows, while any recovery attempts could face resistance at former support zones turned resistance. Traders should exercise caution given the heightened volatility and potential for further erratic price action.